Shares in utilities if there was a Corbyn government

caper7

Can't find a thread on this, unless I've missed it.

I was wondering if anyone was considering selling their shares in utilities due to renationalisation talk in the Labour party.

I wouldn't want to sell up and find Corbyn/Labour don't get in.

I would just be interested to know how you all view the risk, and any steps you may be taking to protect yourselves.

bowlhead99

The way I would approach it might include:

- don't hold shares in individual companies in specific industries without also having shares in companies in all the other industries too. Then you don't have to dodge in and out of sectors.

- don't buy or sell shares in an industry based on posturing by a politician who has come up with an uncosted / unaffordable populist idea which he floats during a time when he knows he's not going to get a majority government and won't have to deliver on it.

AnotherJoe

Probably your best bet would be to buy the day after an election, to benefit from the bounce back after a crash, when it becomes apparent that there are better ways if spending the money.

I did similar a week after the Brexit vote, buying house builders on the grounds that people still needed to live in houses.

Glen_Clark

bowlhead99 wrote: »

The way I would approach it might include:

- don't hold shares in individual companies in specific industries without also having shares in companies in all the other industries too. Then you don't have to dodge in and out of sectors.

- don't buy or sell shares in an industry based on posturing by a politician who has come up with an uncosted / unaffordable populist idea which he floats during a time when he knows he's not going to get a majority government and won't have to deliver on it.

So politics is relevant to savings and investments after all
Given the poll predictions over the Brexit Vote, and May changing her mind and calling a snap election because they were predicting Corbyn would be wiped out, I wouldn't be so sure.
lf Grenfell Tower had burnt down the week before the election (instead of the week after) I believe Corbyn would have been in

Uxb

bowlhead99 wrote: »

- don't buy or sell shares in an industry based on posturing by a politician who has come up with an uncosted / unaffordable populist idea which he floats during a time when he knows he's not going to get a majority government and won't have to deliver on it.

If I was Corbyn I would not even waste time on "affordability"
Simply use the emergency powers acts to sequester and nationalise the lot inc all the PFI's overnight without any compo to be paid at all.
Additionally it would mean any future conservative gov could never privatise them again as everyone would know a future Labour gov would do the same thereby making the shares in any privatisation unsellable.

Or if he was feeling generous pass a two line two para act nationalising the lot and ram it though parliament in a day (much like the 1971 Rolls Royce emergency nationalisation act)
May need to use the parliament act to side step the Lords.
Should get the message across.....

ewaste

I would imagine if a future Government decided to renationalise they would simply pick a fixed date and compensate shareholders based on number of shares held and the share price on that date. Either that or value the company based on tangible assets owned by the company rather than a price set by market speculation.

What is the total market cap of the major utility companies anyway?

bigadaj

ewaste wrote: »

I would imagine if a future Government decided to renationalise they would simply pick a fixed date and compensate shareholders based on number of shares held and the share price on that date. Either that or value the company based on tangible assets owned by the company rather than a price set by market speculation.

What is the total market cap of the major utility companies anyway?

A few tens of billions. Depends on what you determine a utility, BP was government owned for example.

ewaste

Yeah just started looking up the market caps and it would, in relative terms to overall borrowing and spending, be small beer for a Government to renationalise the lot with shareholders being compensated.

agent69

caper7 wrote: »

Can't find a thread on this, unless I've missed it.

I was wondering if anyone was considering selling their shares in utilities due to renationalisation talk in the Labour party.

I wouldn't want to sell up and find Corbyn/Labour don't get in.

If JC becomes PM the fall in the value of a few shares in your local water company will be the least of your worries.

caper7

Agent69 oh, I don't doubt it.

EachPenny

Uxb wrote: »

If I was Corbyn I would not even waste time on "affordability"
Simply use the emergency powers acts to sequester and nationalise the lot inc all the PFI's overnight without any compo to be paid at all.
Additionally it would mean any future conservative gov could never privatise them again as everyone would know a future Labour gov would do the same thereby making the shares in any privatisation unsellable.

Interesting. And what do you think that approach might have on your ability to borrow the billions of pounds you'll need to implement the other policies in your party's manifesto, and what will be your employment policy given that anyone planning investment in jobs and business in the UK will be running for the hills?

The prospect of a future Labour government renationalising the companies didn't stop privatisation the first time around... why would people turn down the opportunity to make money a second time? Investment is all about risk assessment and management... the chaos 'your' government would have caused the country would ensure a 'future conservative gov' would be in power for several decades... so shares offered in the second privatisation would be a fairly safe bet for the timeframe most investors plan for.